Samsung Electronics has been chosen as a foundry partner to produce
cellular chips by U.S. wireless chipmaker Qualcomm.

Under the agreement,
Samsung will make Qualcomm's chips used in code division multiple access
(CDMA) mobile phones on a contract basis.

The two companies also agreed to cooperate on production of system on
chip(SOC) products.

The contract chip deal with Qualcomm will also help Samsung bolster its
relatively weak non-memory operations.

"Our foundry agreement with
Samsung will provide an additional source of supply and assist us in our
strategy aimed to ensure capacity to support existing and anticipated
growth in both CDMA and WCDMA markets," Qualcomm said in a statement.